McDonald's pilots ads on drive-thru order boards in 450 company-owned US restaurants
McDonald's is targeting a media business worth $1 billion over time. The program has not yet rolled out to the franchisees who operate the rest of its roughly 14,000 U.S. locations.
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Key facts, context, and what it means.
Key takeaways
The 450-restaurant pilot has not yet rolled out to the franchisees who operate the rest of McDonald's roughly 14,000 U.S. locations, so reaching a $1 billion media business could depend on them joining.
McDonald’s is targeting a media network business that could grow to $1 billion over time, CNBC reported, with the current pilot running ads on digital drive‑thru order boards.
invidis says ads are widely expected to spread beyond drive-thru screens to digital menu boards, self-order kiosks and the mobile app.
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At its investor day, McDonald's set a target for its new media network: a business that could grow to $1 billion over time, CNBC reported.
The audience advertisers are buying
The pitch starts with reach. McDonald's has a long-term goal of 50,000 restaurants, QSR Magazine reported.
According to CNBC, Amazon and Walmart have each built successful media networks of their own, and businesses of that kind tend to carry high margins. That is why the model deserves a serious look at McDonald's. Its pilot shows ads on the chain's digital drive-thru order boards.
For consumer brands already buying placements from Walmart or Amazon, a restaurant network that reaches 85% of the country would be a new line in the media plan, if it grows beyond company-owned stores.
Screens built for ordering first
invidis points to digital menu boards, self-order kiosks and the mobile app as logical extensions of the media network, and says expansion into more digital channels is widely expected. For now, the ads appear on drive-thru ordering screens.
invidis argues that as more transactions move to digital platforms, McDonald's gains more chances to personalize offers, optimize pricing and generate advertising revenue. In China, about 98% of transactions already run through digital channels, the publication reported.
ArchIQ's in-store tools, and the savings McDonald's has attached to them in QSR Magazine's account of the investor day:
Three percent of the U.S. system
CNBC reported that the pilot is limited to 450 company-owned restaurants. It has not reached franchisees yet, and they run the remainder of McDonald's roughly 14,000 U.S. locations. That suggests the road to $1 billion goes through the franchisees.
The best argument for patience is traffic. An ad network is worth only as much as its visits, and McDonald's expects industry traffic in its wholly owned markets to stay flat, per QSR Magazine, with growth coming from taking market share. That suggests the media business could grow mainly from visits the chain already has, plus any it wins from rivals. CNBC described the pilot, which began in August, as early days.
What to watch
The first thing to watch is the announcement that the drive-thru ads are going into franchised restaurants. The second is ads showing up on a kiosk, a menu board or the app, the placements invidis expects next.
Sources
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